Retiree Diane Hutto of Fort Walton Beach, Fla. bought the giant cosmetics company’s “anti-aging” products, but aged anyway. A refund of what she paid wouldn’t do the trick, it seems; her lawyer’s asking for class action damages that could exceed $5 million depending on the size of the class. (Patrick Danner, “Retiree sues Estee Lauder over anti-aging claim”, Knight Ridder/Salt Lake Tribune, Jun. 18).
Posts Tagged ‘class actions’
Over at Point of Law
The mystery guestblogger over at Point of Law has now been revealed: it’s Prof. Martin Grace of the highly recommended site RiskProf. He’s an insurance and liability expert and will be contributing comments this week and next. We originally announced that there would be a second guestblogger at Point of Law this week as well, but that personage is being held at an undisclosed location and is expected to stop by next month instead.
Also at Point of Law, check out Ted’s posts on Kelo v. New London, the eminent domain case decided today by the Supreme Court, and on anesthesiologists and malpractice; Jonathan B. Wilson’s posts on recent California Supreme Court rulings on punitive damage limits, a $300 million fee for Bill Lerach, and scary scam suits by prison inmates; and my contributions on such topics as how some securities lawyers get clients and the politics of loser-pays.
Strippers, privacy and class actions (again)
Once again the application of class action procedure to the world of exotic dancing is raising privacy issues not encountered in your ordinary everyday class action. In recent Texas litigation (see May 3), the concern is the sending of notices in the mail to past lap-dance customers informing them of their rights to recovery over alleged fee overcharges (which notices will in some cases be opened by their outraged spouses and significant others). And now in a San Francisco wage-and-hour class action, former managers of one club are arguing that many of the exotic dancers themselves don’t want their real names known and face potentially harmful intrusions into their privacy under any notification plan likely to be effective (“Dear Former Exotic Dancer…”). A lawyer pressing the class action, which concerns alleged misclassification of the dancers as independent contractors, dismisses the management argument as merely tactical. (Pam Smith, “Privacy Worries Don’t Shake Up Stripper Class Action”, The Recorder, Jun. 14).
Publicity roundup
Texas Lawyer has a well-reported and personality-filled article, unfortunately not online, detailing how the state’s plaintiffs lawyers became “in many ways…the victims of their own success”; it happened when “tort reformers, provoked by the plaintiffs bar’s hubris, particularly as it was asserted at the state Capitol in Austin, galvanized themselves over the past 15 years to topple the trial lawyers’ dominance over Texas politics.” Also a lot about asbestos-suit reform (Miriam Rozen, “Paradise Lost; Plaintiffs Bar Bemoans End of an Era as Tort Reformers Target Asbestos”, Texas Lawyer, Feb. 28, not online). A Medill News Service dispatch from last December quotes me on the subject of class action jurisdiction (Betsy Judelson, “On the Docket: Getting Out of Madison County”, Medill News Service, Dec.). And Automotive Industries, in an ambitious backgrounder on the liability explosion, mentions my Hillsdale College speech of last year (Gary Witzenburg, “Urgent Need for Tort Reform”, April).
Arthur Andersen; blogospheric comings and goings
Pseudonymous blogger “Robert Musil” has resumed his financial and political blogging after a hiatus and is drawing pointed lessons (May 31, Jun. 1, Jun. 2) from yesterday’s unanimous Supreme Court decision overturning the conviction of Arthur Andersen in the Enron affair. For more on the Andersen case, see Point of Law’s coverage yesterday and today. Among other financial topics “Musil” has been commenting on lately: the Enron scandal itself (here and here), Sarbanes-Oxley (here and here), and the Supreme Court’s recent rebuke to the Ninth Circuit on the calculation of damages in securities cases, in the Dura case.
On a different note, alas, Tim Sandefur is suspending posting at his Freespace blog, which has been a valuable resource on law and libertarian philosophy and often the target of links from this page. Incidentally, the blogroll on Overlawyered’s front page (right-hand column) is deliberately kept short (and rotated fairly often), but the site’s General Links page offers a longer blogroll which readers may enjoy exploring, as does Point of Law (left column).
First sell short, then sue
“There is some evidence that plaintiffs and their attorneys are profitably short-selling the stock of the companies they intend to sue,” writes Moin Yahya of the University of Alberta law faculty in a new paper called “The Legal Status of ‘Dump & Sue'” (SSRN, Mar. 9). Strategic litigants or their attorneys thus stand to capture two distinct strands of revenue: one from the eventual settlement of the suit, the other from the profits they capture after their adversary’s stock declines on the announcement of the suit. (Alternatively, some lawsuits might be rendered profitable by the gains from short-selling even though they never win settlements at all.) Does insider-trading law as it currently stands prohibit such goings-on? Not necessarily, since litigants and their lawyers don’t ordinarily count as “insiders” in conventional terms. But given securities regulators’ goal of upholding what they call market integrity, it’s hard to see why they would not want to prohibit the sleazy practice. For a dissenting view, see Larry Ribstein (Apr. 11).
Update: Lap dance class action
An appeals court in Houston has ruled that two men can proceed with their intended class-action lawsuit against six strip clubs for having added a $5 fee to the price of a lap dance when paid for with a credit card, a practice they say violates Texas law. As has been previously noted (see Sept. 10, 2003), the fun is likely to begin if and when standard notices go into the mail informing past lap dance customers that a lawsuit has gone forward in their name; many of these notifications are likely to be opened by wives and other family members in the class member’s absence. (Roma Khanna, “Panel says men can sue strip clubs over extra fees”, Houston Chronicle, Apr. 23)(via The Slithery D). More: Wave Maker (May 5) wonders whether it might not be divorce lawyers, rather than class action lawyers, behind the scheme.
“Which merger deals draw lawsuits?”
…asks Forbes. Its answer: “The ones that are sure to generate big fees, of course.” University of Arizona law professor Elliott Weiss and New York University economist Lawrence White studied lawsuits filed in Delaware Chancery Court over mergers of Delaware companies between 1999 and 2001. Of 564 mergers, 104 attracted lawsuits, and there was a pattern: the deals sued over “were among the largest, often involved all-cash offers and in more than half the cases the acquiring company owned stock in the firm it was buying.” As it happens, “Delaware law subjects cash takeovers and buyouts by controlling shareholders to much tougher scrutiny than most stock-swap mergers” and in such deals acquirers frequently anticipate negotiations with independent directors, and thus enter a somewhat lower initial bid to leave scope for concessions. It is common, however, for the lawyers who sue to wait for the deal price to rise and then claim credit for having made that happen, thus entitling them to compensation: “according to the study, they sought and got fees averaging $1,800 an hour in the cases where the price rose.” The authors “conclude that in many cases lawyers are ‘exploiting their “license to litigate” primarily to enrich themselves.'” (Daniel Fisher, “Free Riders”, Feb. 14).
Update: Judge approves Abercrombie deal
Update: Blockbuster late fees
To settle litigation filed by the attorneys general of 47 states, the Blockbuster video chain
has agreed to take down the “No Late Fees” signs in its video stores. Customers will continue to pay extra to rent movies for longer than a week — but Blockbuster won’t call that a late fee.
It will be a “restocking” fee or something similar.
The company also agreed to make refunds available for some customers who paid under the earlier policy, and to pay $630,000 to the state AGs for their pains. New Hampshire and Vermont declined to join the action, with the head of consumer protection in New Hampshire explaining that there hadn’t been complaints from his state’s customers; New Jersey continues to pursue its own suit (see Mar. 10). (Michael D. Sorkin, “Blockbuster settles case over signs advertising no late fees”, St. Louis Post-Dispatch, Mar. 30; Peter Lewis, “State settles Blockbuster late-fee allegations”, Seattle Times, Mar. 30; “N.H. opts out of Blockbuster late fees settlement”, Portsmouth Herald News, Mar. 31).